Sony dealt blow in PS3 hacking case over jurisdiction question

A San Francisco Judge has rejected Sony's arguments that the case against …

Sony's legal attacks on the hackers behind the recent release of the PlayStation 3 master keys and custom firmware have only begun, but a California judge has raised questions about where the case should be tried. Sony argued that California courts have jurisdiction due to the use of a Paypal account and George Hotz agreeing to the Terms of Service on the PlayStation Network, but San Francisco district court judge Susan Illston didn't think the issue was that cut and dried.

"If having a PayPal account were enough [for California to have jurisdiction], then there would be personal jurisdiction in this court over everybody, and that just can't be right," she stated, as reported by GamesIndustry.biz. "That would mean the entire universe is subject to my jurisdiction, and that's a really hard concept for me to accept."

The ruling on where the case should be tried has been pushed back, and no specific time frame for a decision has been given. Sony has asked for a temporary restraining order to keep the data off the Internet. It also wants the computer equipment used to crack the system and create the firmware, as well as monetary damages. The arguments for the case to be tried in California, not to mention the case for injunctive relief and monetary damages, are based on somewhat shaky and untested legal ground. This is not a good start for the consumer electronics giant.

106 Reader Comments

Their "user experience" has been anything but consistent. Backwards compatability? Install other OS? Those 2 stand out pretty loudly. Protecting your customers from themselves isn't being very mindfull of the people who handed over a good deal of money for a machine that Sony doesn't seem to think you completely own. "But But Pirates!!!" is no excuse to treat users so poorly

Other OS was removed as a response to a legitimate threat. You really think Other OS would be missing had people used it as it was intended and not as a doorway to unlocking the system?I would love it if Sony turned Other OS back on, but that would also require hackers to show some restraint in how far they hack. So you can send your thanks to Geohot for that one. BC was first a hardward supported feature. Then software, then it was removed all together. It was a cost saving removal and then it turned into a profitable removal now that they are reselling ps2 games updated with HD graphics in anthology packs. I can see someone being upset about that. However, they didnt disable BC. They just changed it and then removed it. I own an original ps3 that plays pretty much any ps2 game. Never actually tried it since I own a ps2 and dont bother playing old games much anyway.

I agree you should own the hardware. And you should be able to do what you want with it. I also think that piracy is wrong and illegal and that Sony owns the PSN service. That means they set the rules. So it would be fair that they ban you from their service if your hardware is tampered with. You cant have your cake and eat it too. They also are under no obligation to allow you to update your system.I would also like you to point out the features Sony has added to the PS3. They have done way more to enhance a users experience than to harm it. Otherwise I want to see you pony up some cash for the features you didnt pay for when you bought the system.

I own a PS3. It is in my best interests for Sony to have a solid business model, based on secure tech, so that as a consumer I can have the best possible experience.

(EDIT: I understand that the rest of your post went in a different direction. I'm reacting to the relatively common sentiment I see on Ars that locking down the platform helps the user somehow.)

Really? Have you tried using the web browser on the damn thing? It's absolute unadulterated garbage and one of the things the "secure tech" Sony provides manages to do is keep you from installing a third-party browser on their *extremely* capable hardware. Is that really in your best interest? There is no end to the value that could be added to the hardware by the addition of various pieces of third-party software, but instead you're stuck waiting for Sony to get around to implementing things, and even then their focus seems to be more on this asinine DRM struggle than on actually delivering features to the end-user.

On the other hand you have Sony and various other businesses insisting that DRM "enables" features for users, this is an outright lie. The reasoning I usually see is that "content providers" will be unable to allow access to their content unless the platform is locked down, and therefore the reductions of your rights are necessary in order to allow distribution of content on a particular platform to occur. (Intel is doing the same thing with "TPM".) I understand that trusting your users to pay for content is a scary proposition, but the fact is that the cat is out of the bag, users already have the option to access practically all of your media, and all the platform lockdown and DRM being added is not making a difference to that situation. What seems to have been forgotten in all of this is that the consumers as a whole actually have the power here, if consumers say, "I'm not interested in DRM-encumbered media", the various content providers will either come around and provide the media unencumbered or will become irrelevant, and in the end the consumers will have access to the media they want. Alternately you can abuse your honest users, alienate them, and drive them to circumvent your protections as well.

Please, if you can, tell me how Sony locking down the hardware makes for a better user experience without resorting to the above argument about "enabling distribution of protected content". If you disagree with my refutation of that position or my characterization of the argument go ahead, but it won't really add anything if you just repeat the argument.

No, I have not used the web browser on the PS3. I use my computer for that. Sony having control of its platform ensures that it remains economically viable and that they continue to make high quality products. Companies tend to go where the money is. I am happy to have provided you an outlet to vent all that anger. Hope you feel better. Trying to shape the course of the discussion by outlining for me (how generous of you) the terms of what constitutes an acceptable answer for you is a bit on the bold side. I elect to ignore it.

However, that does not mean their contents can't be argued against in court, or that their text can't be denied, or even that someone can't decide to disobey. That is, ToS are legally binding, but they are not automatically sanctioned. It's up to court to decide -- usually during litigation -- whether a certain ToS entry has any legal value.

On this particular case, I'm not that familiar with American law and that judge ruling did surprise me. I was expecting that text to be linearly dismissed not on the grounds of jurisdiction, but simply because I thought a ToS cannot redefine jurisdiction.

I love the internet and it's online lawyers. Please, continue to present your evidence to the intern...I mean, court.

Yeah, I love the internet too. I especially liked the part where you don't even make a point of arguing about what is wrong, if anything, with the quoted post.

“the activity of an iPhone owner who modifies his or her iPhone’s firmware/operating system in order to make it interoperable with an application that Apple has not approved, but that the iPhone owner wishes to run on the iPhone, fits comfortably within the four corners of fair use.”

Someone tell me why you can't just substitute PS3 for iPhone and Sony for Apple in that statement?

The argument of "you own the hardware" is kind of moot, though. Yes, you own the hardware. Sony can't come into your house and take it, you bought it. The software you run on it, however, is Sony's and like many software vendors wants some say on what you do with it. The fact these two parts are intrinsically tied is where the problem comes up. If you totally wiped any trace of the PS3's stock OS and installed your own that didn't support the ability to play games Sony probably wouldn't have much of a problem. Look at the "supercomputers" out there made with PS3 hardware that more or less have Sony's blessing.

Other OS was removed as a response to a legitimate threat. You really think Other OS would be missing had people used it as it was intended and not as a doorway to unlocking the system?

Sadly, it was a poorly though out move and made them more of a target. This is the result: a system completely open.

Knowing what we know now about the PS3 security, Other OS was basically a decoy. It wasn't until that door was shut that hackers realized they didn't even need it. I have no doubt that the end result no matter what Sony did would be a hacked system. It was only a matter of time. As you said removing Other OS was a glove slap. Which begs the question about restraint and responsibility. Why does a closed system have to be a challenge to break. Why cant it just be what the developer wants it to be. If you want a better internet browser for your PS3, go to the blog and sound off about it and do like reasonably adult do and be patient. http://share.blog.us.playstation.com/And if you still feel you're not being heard, then go give your money to the competition. The ultimate result of this situation is not a completely open system. Sony will fight and they will try security updates or new hardware to stop it. They will spend time developing solutions instead of developing features. Sony will be labeled the greedy villain that picks on the little man who thinks they deserve everything they want, when they want it, and for free. And we will all be poorer for it.

When you download and install the latest firmware, doesn't it present you with a ToS that you have to agree to? I was wondering if, even though GeoHot does not have a PSN account (which I doubt), he still could have agreed to a ToS when he downloaded and installed (then subsequently hacked) the firmware.

The argument of "you own the hardware" is kind of moot, though. Yes, you own the hardware. Sony can't come into your house and take it, you bought it. The software you run on it, however, is Sony's and like many software vendors wants some say on what you do with it. The fact these two parts are intrinsically tied is where the problem comes up. If you totally wiped any trace of the PS3's stock OS and installed your own that didn't support the ability to play games Sony probably wouldn't have much of a problem. Look at the "supercomputers" out there made with PS3 hardware that more or less have Sony's blessing.

So they can come in and take the software instead? And the whole "supercomputers" was wiped out with Sony's consent. I don't understand why people think one person should be locked up over information. Just because someone has the ability to do a bad deed doesn't exactly promise they will. The guy rooted the PS3. If someone uses that to run pirated software, then the devs can go cry in their cereal or whatever. That doesn't mean if the person couldn't pirate a game means automatically they would have bought it. Piracy is not 1:1 lost sales. Is it wrong/disrespectful of the person who put the time into it? Absolutely. But one has to realize there are risks/rewards to most any type of creation and plus, as much as someone wishes, they have no control over what people do with their creation. You can't control it any more than the tides. If someone is doing something you don't like with your product/service/information, maybe you're doing it wrong...

...SNIP... And if you still feel you're not being heard, then go give your money to the competition.

The ultimate result of this situation is not a completely open system. Sony will fight and they will try security updates or new hardware to stop it. They will spend time developing solutions instead of developing features. Sony will be labeled the greedy villain that picks on the little man who thinks they deserve everything they want, when they want it, and for free. And we will all be poorer for it.

I completely agree with you. The ironic thing is that Sony is one out of the 3 that are the most open and the most generous with their console (free online, non-proprietary hard drives, bluetooth compatibility with keyboards and mice, etc.). Sure, they could be better, but that's not a reason to destroy their whole ecosystem. The game developers and users count on the PS3 to be secure so they have some level of confidence that it's going to work as designed for everyone--that's the whole point of playing a game on a console versus playing it on a PC or Mac. Now that the hack is out to supposedly just enable OtherOS, it is also enabling people to hack their trophy count, pirate Blu-rays and games, and I'm sure it will lead to more security vulnerabilities down the line. GeoHot is a pretty huge lowlife for having absolutely no sense of accountability for what he's done.

I own a PS3. It is in my best interests for Sony to have a solid business model, based on secure tech, so that as a consumer I can have the best possible experience.

Please, if you can, tell me how Sony locking down the hardware makes for a better user experience without resorting to the above argument about "enabling distribution of protected content". If you disagree with my refutation of that position or my characterization of the argument go ahead, but it won't really add anything if you just repeat the argument.

No, I have not used the web browser on the PS3. I use my computer for that. Sony having control of its platform ensures that it remains economically viable and that they continue to make high quality products. Companies tend to go where the money is. I am happy to have provided you an outlet to vent all that anger. Hope you feel better. Trying to shape the course of the discussion by outlining for me (how generous of you) the terms of what constitutes an acceptable answer for you is a bit on the bold side. I elect to ignore it.

Good job completely ignoring the question, HOW does "Sony having control of its platform" ensure "that it remains economically viable and that they continue to make high quality products"? Nothing else about the platform changes, but I can install a browser or whatever other application on the machine that actually works, how does this keep Sony from publishing high-quality games?

I assume by "companies go where the money is" you mean that PS3 gets more exclusives due to their security? First of all I'm not at all convinced that whatever exclusives the PS3 has are due to its security, and secondly the count of exclusives seems to be Xbox360:111 vs PS3:124, (sourced from Wikipedia, if you have more reliable numbers feel free to provide them) so the numbers are rather inconclusive as well.

And yes, I took the liberty of pointing out that if your response consisted entirely of Sony marketing buzzwords (as it did) that it would be completely pointless. Just repeating that lockdown==profit does not make it true.

Being able to do whatever you want with a PS3 would provide an excellent user experience. Locking down the system allows Sony to provide a consistent user experience. It also gives them security in their investment. PS3's for the longest time were sold at a loss. The intent was that peripherals and software would make up the loss. Sony simply cannot afford to allow any activity that would lead to piracy. If people are not buying games, then Sony cannot put out game systems and developers will not develop games for it. I have long thought that Sony should embrace an app store style for the PS3 and PSP. That would hopefully appease the true homebrewers. However, lets be honest. The number of people interested in piracy far outnumbers those interested in homebrew. The argument for running "backups" off the harddrive is laughable. As are disclaimer statements from hackers "I dont condone piracy" but here is the tool to do it.So it all comes back to a shared responsibility. Sony should open up the system and homebrew people should show restraint. Oh, wait..Thats exactly how it went down. Sony provided Other OS, and things were fine. Then hackers kept looking into exploits to open the system more. So Sony removed Other OS. And now here we are. Some people have to treat every piece of electronics like its Mount Everest. Sometimes you have to recognize where the line is or keep your exploit to yourself. People like Geohot could just keep their hacking private, but they have to feed the ego and show how great they are. He's not a hero or a liberator. All he did was ruin it for the rest of us. He has probably made it so that no game console of the future will have any kind of openness at all. Its just going to get worse.

Thank you for saying what I wasn't able to clearly state (english is not my first language). I especially like the part about people saying it's for running "backup, (wink-wink, nudge-nudge)" copy of their games. Let's face it the majority of people who are going to hack the system will do it so they can play pirated games.

When you download and install the latest firmware, doesn't it present you with a ToS that you have to agree to? I was wondering if, even though GeoHot does not have a PSN account (which I doubt), he still could have agreed to a ToS when he downloaded and installed (then subsequently hacked) the firmware.

I doubt there is any way of proving he agreed to it. He is fully capable of writing a firmware loader that doesn't make you agree to a ToS.

The ultimate result of this situation is not a completely open system. Sony will fight and they will try security updates or new hardware to stop it. They will spend time developing solutions instead of developing features.

1. Firmware updates cannot fix the described break, if you can sign new firmware you can just keep updating the firmware, though it might take some fiddling to keep new updates from breaking things.2. Sony will spend time trying to put the genie back in the bottle for sure, but it is their broken business model that requires them to do so, blame them for that rather than blaming people who just want full access to their $600 toy.

jlytle1234 wrote:

Sony will be labeled the greedy villain that picks on the little man who thinks they deserve everything they want, when they want it, and for free. And we will all be poorer for it.

Sony will be labeled the rampaging control freaks that they are. I'll admit that *you* might be the poorer for it, too bad.

jase52476 wrote:

I completely agree with you. The ironic thing is that Sony is one out of the 3 that are the most open and the most generous with their console (free online, non-proprietary hard drives, bluetooth compatibility with keyboards and mice, etc.). Sure, they could be better, but that's not a reason to destroy their whole ecosystem. The game developers and users count on the PS3 to be secure so they have some level of confidence that it's going to work as designed for everyone--that's the whole point of playing a game on a console versus playing it on a PC or Mac. Now that the hack is out to supposedly just enable OtherOS, it is also enabling people to hack their trophy count, pirate Blu-rays and games, and I'm sure it will lead to more security vulnerabilities down the line. GeoHot is a pretty huge lowlife for having absolutely no sense of accountability for what he's done.

I'll admit the PS3 is the best of the current crop of consoles as far as device interoperability, but the whole crop fails big time as far as letting users actually use their hardware. I do have to disagree with the characterization of these features being "generous". They're features they decided to deploy in their sales campaign, nothing more.

As for your "cats and dogs living together" scenarios...trophy count: Seriously? who gives a crap? Regardless this sounds like something that should be handled server-side if you want it secure anyway, if their system is so broken that all it takes is putting in an app that tells the server, "hey I've unlocked all these trophies" and it actually works, they deserve what they get.pirate blu-rays: Already done... Blu-ray security was broken quite a while back...pirating games: This might be an issue, I mean look at how the Xbox360 completely failed once you could run pirated games on... wait what? Record sales of Xbox360 software this month?other security issues: huh??? What is left after pirating the games and hacking your trophy count?GeoHot: No idea if he's a lowlife or not, never met the guy, and I'll bet you haven't either.

Other OS was removed as a response to a legitimate threat. You really think Other OS would be missing had people used it as it was intended and not as a doorway to unlocking the system?

Do you really think that's a valid excuse? I can use my car as a battering ram to commit property crimes or assault, but that doesn't mean my car should be taken away because somebody else did so.

Wait, shit... car analogy.

There is no correlation to your analogy. Piracy hurts Sony and game developers without question. Using your car as a battering ram does not financially hurt GM, Ford, or whoever your weapon of choice is. Using your car as a battering ram also has less legal gray area than piracy. You will clearly go to jail for it. Whereas pirates are largely unpunished.

Other OS was removed as a response to a legitimate threat. You really think Other OS would be missing had people used it as it was intended and not as a doorway to unlocking the system?

Do you really think that's a valid excuse? I can use my car as a battering ram to commit property crimes or assault, but that doesn't mean my car should be taken away because somebody else did so.

Wait, shit... car analogy.

There is no correlation to your analogy. Piracy hurts Sony and game developers without question. Using your car as a battering ram does not financially hurt GM, Ford, or whoever your weapon of choice is. Using your car as a battering ram also has less legal gray area than piracy. You will clearly go to jail for it. Whereas pirates are largely unpunished.

Huh, "without question" certainly seems to be rather strong language on the subject for Ars, what with the frequent, well-sourced articles about how the evidence supporting the "piracy epidemic" is poor to outright invented...

The nature of how judges get and keep their jobs tend to make them the most reasonable segment of our law enforcement system, with more reasonableness happening as you get higher up the court food chain. It also means they are usually behind on technology. Fortunately, a lot of the ridiculous and harmful cases like this are not just technologically stupid, they are procedurally stupid. Judges hate it when they think you are trying to play games with the law.

You've obviously not read many opinions by Justices Thomas or Scalia. Those guys are batshit loco.

I'll admit the PS3 is the best of the current crop of consoles as far as device interoperability, but the whole crop fails big time as far as letting users actually use their hardware. I do have to disagree with the characterization of these features being "generous". They're features they decided to deploy in their sales campaign, nothing more.

As for your "cats and dogs living together" scenarios...trophy count: Seriously? who gives a crap? Regardless this sounds like something that should be handled server-side if you want it secure anyway, if their system is so broken that all it takes is putting in an app that tells the server, "hey I've unlocked all these trophies" and it actually works, they deserve what they get.pirate blu-rays: Already done... Blu-ray security was broken quite a while back...pirating games: This might be an issue, I mean look at how the Xbox360 completely failed once you could run pirated games on... wait what? Record sales of Xbox360 software this month?other security issues: huh??? What is left after pirating the games and hacking your trophy count?GeoHot: No idea if he's a lowlife or not, never met the guy, and I'll bet you haven't either.

I guess you don't own an 360 or a Wii, because I am pretty sure that MS and Nintendo do not let you share your downloaded games with anyone. In fact, you can't even transfer your Wii downloaded titles to another Wii that you bought (even if it's a replacement). I read a story not too long ago that this person spent hundreds of dollars on Wiiware and had to spend a ton of time on the phone with Nintendo to get them to let him send in both his Wii consoles so they could transfer the games from one to the other. I'm pretty sure that with a 360, you can't even load a XBL game on multiple 360s that you own (at least that used to be the case as far as I know). The PS3 allows you to have the games on multiple systems and multiple devices. I'd say that Sony not only allowing you to transfer your PSN games from one to up to four additional consoles is pretty damned generous.

Also, Sony could have gone the proprietary route with the HDs (like the 360) and charged upwards of $200 for a sliver of more space--but they didn't. Wii has no HD, so it's not in the equation, but at least they let you use non-proprietary SD cards (360 may do that as well). Relatively speaking, that's pretty darn generous too.

Yeah, some people actually care about trophies--just like a super small number of people actually cared about Other OS.

Other security issues, such as password sniffers and being able to get your CC info? Ever think about that?

Quote:

GeoHot: No idea if he's a lowlife or not, never met the guy, and I'll bet you haven't either.

[/quote]

I saw his interview on G4, and it pretty much sounds like he sees nothing wrong w/what he's done, and he's surely not taking any accountablility--so yeah, I stand by my opinion of him.

Other security issues, such as password sniffers and being able to get your CC info? Ever think about that?

Wow, your shoulder must be sore after that stretch...

Why is it a stretch? You can now run any unsigned code on a PS3, what prevents someone from creating a botnet or a virus? From what I understand, the security on the PS3 is pretty much broken, so I would imagine that a lot of things are possible now.

Just to put on the paranoia hat for a little while, why couldn't/wouldn't Sony release something online (secretly of course, hence the paranoia) to either brick the system, (or wipe mac addresses on ethernet/wireless?) or break or reduce functionality in some other way, and then just shrug their shoulders and say this is what you get when the platform gets compromised and don't download anything unless it's come from PSN. Maybe embed some kind of mechanism in a nice new ISO Manager Software for XMB or something like that.

Geohot and crew may have let the Genie out of the bottle, but what if Sony made that genie have a hangover and an evil streak? What fun is that openess if you have to fear for the sanctity/safety of the system? As the system is by design a fixed hardware platform, it should be easy to come up with something that could effect a lot systems very quickly....People that buy/purchase discs or software from PSN would not be at risk.

just because you put things a lawyer says into some onscreen text doesn't mean it's legally binding.

It is legally binding. ToS are. It's a misconception they aren't.

However, that does not mean their contents can't be argued against in court, or that their text can't be denied, or even that someone can't decide to disobey. That is, ToS are legally binding, but they are not automatically sanctioned. It's up to court to decide -- usually during litigation -- whether a certain ToS entry has any legal value.

On this particular case, I'm not that familiar with American law and that judge ruling did surprise me. I was expecting that text to be linearly dismissed not on the grounds of jurisdiction, but simply because I thought a ToS cannot redefine jurisdiction.

I love the internet and it's online lawyers. Please, continue to present your evidence to the intern...I mean, court.

Our TOS has been upheld 8 out of 8 times in an Ohio court. Now this has all been for B2B transactions.

Cause they can do all that now now that one doesnt have to contend with the pesky security on PCs. You're right. Won't be long til we're all speaking Chinese I'm sure. Hackers have the A-bomb X 1,000,000!

Wait... what does this judge mean "the whole universe"? The whole universe has a Paypal account. Is that what she thinks? Who even uses Paypal? People that don't have credit cards... am I reading that bit wrong or is this judge seriously misinformed.

Cause they can do all that now now that one doesnt have to contend with the pesky security on PCs. You're right. Won't be long til we're all speaking Chinese I'm sure. Hackers have the A-bomb X 1,000,000!

You can dismiss it all you want, but these people are highly intelligent, and if it's remotely possible to compromise one PS3, it's not too far of a stretch to be able to take over someone else's PS3. Let's hope you guys are right, and it won't affect legitimate customers.

And once again, the PC still rules as practically the only device left that is actually yours. BTW, this is not an endorsement about PC over consoles for gaming, I actually prefer consoles. I'm just saying PC manufacturers still allow you to do whatever you want with your property you thought you purchased, for the most part. I'm pretty sure I can install Linux if I wanted to. And I've already installed more than one browser.

Not everyone is a pirate and not everything's for piracy. I'm getting very tired of manufacturers and their employees, fanpeople or whatever you people are constantly saying that just to justify the fact that companies(especially if they deal with media) now want people to practically rent their equipment at high prices. So they retain a sort of ownership and control over the customer. A lot of this just to appease content providers who also think they own the consumer, of which don't forget, Sony is one of those content providers too.

It used to be you bought it, you own it. Not so anymore. Now it's you thought you bought it but you actually paid a nice bit of cash just to rent it. We can disable our equipment at our whim and you can't get your $300+ back even if we do. Because you only rented it, even though it was recorded as a purchase.

I don't know if GeoHot's a jerk or not, but it seems he made it possible again to use the PS3 as the semi-computer it was first advertised to be and what many people based their "purchases" on(and at that time $400-$600 mind you), then got stripped of. He said he was going to do this a while ago.

As for security threats and piracy, well the PC has that more than anything. And yet that segment of manufacturing understands that the purchaser is responsible for their own behavior and for securing their property themselves, but they still indeed own their equipment. And I have not been told to this day what I can and cannot install or modify, as long as the equipment can handle it.

HOW does "Sony having control of its platform" ensure "that it remains economically viable and that they continue to make high quality products"? Nothing else about the platform changes, but I can install a browser or whatever other application on the machine that actually works, how does this keep Sony from publishing high-quality games?

I assume by "companies go where the money is" you mean that PS3 gets more exclusives due to their security? First of all I'm not at all convinced that whatever exclusives the PS3 has are due to its security, and secondly the count of exclusives seems to be Xbox360:111 vs PS3:124, (sourced from Wikipedia, if you have more reliable numbers feel free to provide them) so the numbers are rather inconclusive as well.

And yes, I took the liberty of pointing out that if your response consisted entirely of Sony marketing buzzwords (as it did) that it would be completely pointless. Just repeating that lockdown==profit does not make it true.

Here's your console business 101.

Format holder (eg Sony) spend billions in R&D building console (eg PS3). They sell the console itself at a loss (at least initially - for PS3 that may still be true, haven't seen figures recently) and hope to make the R&D money back and more through a fee on each copy of a game for their system sold. Nowadays, the format holder also makes money in various other ways (episodic, downloadable content, stuff like LIVE membership, avatar bits and pieces, and so on) but these are still small fry compared to the disc in a box in the store model.

The important numbers for the format holder are a) attach rate, ie how many games on average each user buys; and b) how much of a loss they make on each console, ie how many games they need the user to buy to make the console sale profitable.

Therefore piracy and used game sales are hated by format holders (no money coming back to help dig themselves out of the R&D hole and into profit), publishers (no money coming back on the investment to make the game) and developers (less chance of recouping the development advance and maybe just for once making some royalty).

Open system means people running pirate games or spending their hours on the PS3 doing things other than playing games. And that means the attach rate starts to drop.

Platform exclusives are often partly or wholly funded by the platform owner; having a Mario, a Halo or an Uncharted means people may specifically buy a console to play them, and once they do that, they will likely also buy more games and that will help make a profit.

Exclusives are not down to security. But publishers are massively risk averse. If they think a game is likely to fail to recoup the development, marketing and distribution costs on a platform - for whatever reason t- hey won't launch it on that platform. Rampant piracy is one reason why they might fear not recouping. And I would stick my neck out and say that publishers are so risk averse that just the talk about the PS3 breach is enough for them to be thinking twice - they don't need figures or mass seizures or whatever. They don't think piracy is about 1:1 sales lost, but they are a business - they want to make their money back.

Format holder (eg Sony) spend billions in R&D building console (eg PS3). They sell the console itself at a loss (at least initially - for PS3 that may still be true, haven't seen figures recently) and hope to make the R&D money back and more through a fee on each copy of a game for their system sold. Nowadays, the format holder also makes money in various other ways (episodic, downloadable content, stuff like LIVE membership, avatar bits and pieces, and so on) but these are still small fry compared to the disc in a box in the store model.

The important numbers for the format holder are a) attach rate, ie how many games on average each user buys; and b) how much of a loss they make on each console, ie how many games they need the user to buy to make the console sale profitable.

The biggest problem I have with Sony (and the console industry in general) is that they've built themselves a business model (as you've described) that puts them in an adversarial position relative to their customer (their profit depends on customers using the product the "right" way), and then they complain when the customer acts as their adversary and tries to defeat all the restrictions they put in place.

The PC hardware industry may have higher upfront costs for the hardware, but they aren't generally running a business model that depends on restricting how customers use their products. There's no technical reason why Sony couldn't create essentially the same hardware, with the same "console-style" interface on the pre-installed OS, leave it as completely open as any other PC for people to tinker with, and just sell it at a price that earned them a reasonable profit on the hardware.

They chose a customer-hostile business model by choice because they thought it would earn them more money in the long run from game license fees, and I'm more than happy to see them (or others with similar business models) get burned when customers eliminate the restrictions.

I don't have a PS3, and when I find time for gaming it's on a PC, preferably in Linux, so I don't have a direct stake in the PS3 security being breached, but anything that makes the subsidized console business model less attractive is a good thing in my opinion.

I agree! Because it's not like MW2 wasn't already a piss-poor game for hacks and cheats, right? Hell, let's take your argument to the next logical step!

Letting people modify something they physically own can lead to modifications that are outside spec. Leading to others getting hurt. So we can't let anything be modified, unless it's expressly designed to be modified and the manufacturer expressly requests you do so.

I suppose you could say the same for PC's. Or houses. Or cars. Or boats. Guns. Altering beyond the factory spec can lead to hacks, accidents, incidents, or even deaths. Accordingly, I say throw the BOOK at all who dare modify their property, regardless of whether they specifically did actually hurt anyone through their modification!

Or you could just blame the people doing the actual hacking of the trophies, the actual hacking of the MW2 games. The guy who made the firmware to enable homebrew and Other OS? He didn't hack your MW2 game, he didn't hack the trophies any more than your neighbor down the street didn't blow up a house a thousand miles away when someone else hit a gas main while trying to dig a tunnel to China.

You claim we should think of the innocents who didn't hack at all. I say the innocents who DID install the new firmware, but who did NOT hack a trophy or an online game are just as innocent and blameless. He wanted Other OS. He bought his PS3 for Other OS. Sony took it away. He wanted it back. Why is one group's interests more important than another's? Because you happen to be part of one of those groups?

For five years, you had secure online gameplay. For four years, he had the Other OS feature he was promised when he bought the console. Then one day it was taken away. Even if your implication is right and MW2 is now totally unplayable, how is that any different than the day Other OS was taken away? How is it any worse? Because fewer people used it? Because the company that sold you that console as having that feature was the one who decided to remove it? I don't know, that seems worse to me. At least the hacker wasn't trying to hurt you. He was trying to add back what was taken. Sony just took something away.

And a feature taken away is a feature taken away. A wrong is still a wrong. Hotz merely restored said feature. If someone else took from online gamers and trophy collectors, then you need to work on blaming THAT person, not the guy who taught everyone to modify their console. See, I can understand blaming Sony for disabling Other OS. And I can understand blaming the hackers that are ruining MW2 games. I can even see blaming those guys harmlessly inflating their Trophy scores so much that it makes you feel like your hard-earned e-p33n is worthless.

But blaming a guy who expressly refused to assist in piracy or anything beyond homebrew and Other OS re-implementation? That's just you scapegoating him. After a drive-by, do you blame the gun maker, the gun designer, the bullet manufacturer, the car maker, the car dealership, the store that sells the bullets, the store that sold the gun, the target range where the guy who did the shooting practiced his aim, the maker of the paper targets the man used to practice his aim, the McDonalds employee that sold the guy a McDouble (w/cheese and extra pickle) to help stave off the munchies so he could focus on the bloodshed at hand...

Or do you ignore all those guys that set up in a small way for what was to later happen and blame the guy who did the actual act of violence against innocent people? Because I don't know about you, but I'm always hearing about these guys going to jail and it's rather often the guy who pulled the trigger or told the guy to pull the trigger. Hotz's firmware enables people to get Other OS back. Some have taken his work and turned it into a way to ruin other people's games. Gun makers make pistols to keep you safer in your own home. Some have taken this work and turned it into a way to end other people's lives.

See, I just don't think the logic is obvious or fluid that leads one to blame Hotz for the actions of others.

I agree! Because it's not like MW2 wasn't already a piss-poor game for hacks and cheats, right? Hell, let's take your argument to the next logical step!

Letting people modify something they physically own can lead to modifications that are outside spec. Leading to others getting hurt. So we can't let anything be modified, unless it's expressly designed to be modified and the manufacturer expressly requests you do so.

I suppose you could say the same for PC's. Or houses. Or cars. Or boats. Guns. Altering beyond the factory spec can lead to hacks, accidents, incidents, or even deaths. Accordingly, I say throw the BOOK at all who dare modify their property, regardless of whether they specifically did actually hurt anyone through their modification!

Or you could just blame the people doing the actual hacking of the trophies, the actual hacking of the MW2 games. The guy who made the firmware to enable homebrew and Other OS? He didn't hack your MW2 game, he didn't hack the trophies any more than your neighbor down the street didn't blow up a house a thousand miles away when someone else hit a gas main while trying to dig a tunnel to China.

You claim we should think of the innocents who didn't hack at all. I say the innocents who DID install the new firmware, but who did NOT hack a trophy or an online game are just as innocent and blameless. He wanted Other OS. He bought his PS3 for Other OS. Sony took it away. He wanted it back. Why is one group's interests more important than another's? Because you happen to be part of one of those groups?

For five years, you had secure online gameplay. For four years, he had the Other OS feature he was promised when he bought the console. Then one day it was taken away. Even if your implication is right and MW2 is now totally unplayable, how is that any different than the day Other OS was taken away? How is it any worse? Because fewer people used it? Because the company that sold you that console as having that feature was the one who decided to remove it? I don't know, that seems worse to me. At least the hacker wasn't trying to hurt you. He was trying to add back what was taken. Sony just took something away.

And a feature taken away is a feature taken away. A wrong is still a wrong. Hotz merely restored said feature. If someone else took from online gamers and trophy collectors, then you need to work on blaming THAT person, not the guy who taught everyone to modify their console. See, I can understand blaming Sony for disabling Other OS. And I can understand blaming the hackers that are ruining MW2 games. I can even see blaming those guys harmlessly inflating their Trophy scores so much that it makes you feel like your hard-earned e-p33n is worthless.

But blaming a guy who expressly refused to assist in piracy or anything beyond homebrew and Other OS re-implementation? That's just you scapegoating him. After a drive-by, do you blame the gun maker, the gun designer, the bullet manufacturer, the car maker, the car dealership, the store that sells the bullets, the store that sold the gun, the target range where the guy who did the shooting practiced his aim, the maker of the paper targets the man used to practice his aim, the McDonalds employee that sold the guy a McDouble (w/cheese and extra pickle) to help stave off the munchies so he could focus on the bloodshed at hand...

Or do you ignore all those guys that set up in a small way for what was to later happen and blame the guy who did the actual act of violence against innocent people? Because I don't know about you, but I'm always hearing about these guys going to jail and it's rather often the guy who pulled the trigger or told the guy to pull the trigger. Hotz's firmware enables people to get Other OS back. Some have taken his work and turned it into a way to ruin other people's games. Gun makers make pistols to keep you safer in your own home. Some have taken this work and turned it into a way to end other people's lives.

See, I just don't think the logic is obvious or fluid that leads one to blame Hotz for the actions of others.

Ok, a lot of this argument has already been had many many times. But let's not forget the chronology of the events here. The Other OS feature was there at launch. This in and of itself is a huge deal, because like the other console makers, this is expressly forbidden. Sony built the thing to expressly allow for someone to install another OS. Unfortunately, Sony did not open up the PS3 quite enough for everyone, so some people, GeoHot being one, were working to break the security to gain more access. I'm not an expert in security, but he must have been getting a little too close for Sony's comfort, and they retailiated by writing the Other OS out of the next firmware.

Let's pause here for a minute. This was the main point where you, as a user, had a choice. You could opt not to load the next firmware, but as a condition, you would not be allowed back on PSN (the main source of game patches, etc.). So, the Other OS was not just taken away all of a sudden, you had to go through all kinds of prompts that expressly told you it was not going to work, and if you needed it, do not upgrade. Now, if GeoHot had not released his methods of modifying the PS3 to crack that one layer of encryption, everyone bitching today would have their Other OS option. You'd think, hey, whose fault is it? I say it's GeoHot's fault. I'm sure a lot of others will say it's Sony's fault, because they made the dumb decision to disable the Other OS completely instead of playing the perpetual whack-a-mole game if they were to keep it. Sure, they took the easy way out, and it ended up biting them because their encryption wasn't as good as they thought it was.

Now, not to be dissuaded, GeoHot persisted in trying to get the Other OS back. He failed and finally gave up (as far as I know, I have not done a lot of research on this part).

Enter fail0verflow people. They were able to do more than GeoHot was able to do, without physically modifying the hardware. GeoHot took what they did, and took it a step further, then uncovered the main encryption key. Rendering it useless.

Now, you can debate all of this, whether you own this or Sony owns that, but the main issue that I have is that GeoHot did not have the right to distribute the hack on the Internet. In my opinion, he has absolutely no ethics whatsoever; it's completely irresponsible to do what he did, knowing that it can be used by the wrong people. Maybe it's not against the law, but in my book, it's still wrong.

A whole lot of things are distributed on the internet and can be used for right or wrong.

Sony collected a lot of cash off those older systems that ran OtherOS and did indeed take it away by what I call a false choice. Not only did you lose a partition and couldn't reclaim it unless you refomatted the entire hard drive from what I understand, but also if you wanted to actually do some gaming online or use PSN period, you had to accept the loss of what you paid for. But those 2 things are a major purpose of the PS3. So technically they crippled your system at their will after collecting your $400-$600, which was likely more in the EU. They also actively promoted this feature, even had a page set up for it, and some people(true not the majority) did buy the PS3 for a dual purpose. I wouldn't appreciate paying $400-$600 for something just to have the company take features away after I paid.

So maybe Geo's not entirely with clean hands but Sony isn't either. From what I remember, with his old hack you had to open up the machine, which voids your warranty anyway and a novice would probably brick it. How many people are going to do that? That was a knee jerk anti-consumer reaction by Sony and now it's come back to haunt them full force.

And once again, the PC still rules as practically the only device left that is actually yours. BTW, this is not an endorsement about PC over consoles for gaming, I actually prefer consoles. I'm just saying PC manufacturers still allow you to do whatever you want with your property you thought you purchased, for the most part. I'm pretty sure I can install Linux if I wanted to. And I've already installed more than one browser.

Not everyone is a pirate and not everything's for piracy. I'm getting very tired of manufacturers and their employees, fanpeople or whatever you people are constantly saying that just to justify the fact that companies(especially if they deal with media) now want people to practically rent their equipment at high prices. So they retain a sort of ownership and control over the customer. A lot of this just to appease content providers who also think they own the consumer, of which don't forget, Sony is one of those content providers too.

It used to be you bought it, you own it. Not so anymore. Now it's you thought you bought it but you actually paid a nice bit of cash just to rent it. We can disable our equipment at our whim and you can't get your $300+ back even if we do. Because you only rented it, even though it was recorded as a purchase.

I don't know if GeoHot's a jerk or not, but it seems he made it possible again to use the PS3 as the semi-computer it was first advertised to be and what many people based their "purchases" on(and at that time $400-$600 mind you), then got stripped of. He said he was going to do this a while ago.

As for security threats and piracy, well the PC has that more than anything. And yet that segment of manufacturing understands that the purchaser is responsible for their own behavior and for securing their property themselves, but they still indeed own their equipment. And I have not been told to this day what I can and cannot install or modify, as long as the equipment can handle it.

Its still you bought it you own it. The hardware is yours. They cant confiscate that from you. You can modify it to your hearts content. Paint it pink for all they care. But the software and services is something else entirely. There is still a debate about software being licensed or owned. That is a gray matter that even the mighty PC struggles with. I dont think there is a one size fits all answer for software being licensed or owned. I personally think that if the developer is maintaining the software with updates and you want to receive those updates then you should not be able to modify it beyond their authorizations. Now I think it would be perfectly acceptable to stop getting updates and go nuts. But you should not be allowed to have all the benefits of the people that play by the rules. Services like the PSN clearly belong to the provider. Sony can decide who they want to connect to the PSN and you have no right to use unauthorized methods to bypass their security. Aside from open source, PC software is the same way. Microsoft and Apple arent cool with you running a pirated version of Windows or OSX. Blizzard has banned many people for using unauthorized hacks for WOW. Many PC games have DRM.